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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| SENATE BILL |
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| INTRODUCED BY RAFFERTY, GREENLEAF, TARTAGLIONE, SCARNATI, PILEGGI, GORDNER, ORIE, FONTANA, KITCHEN, STACK, MENSCH, KASUNIC, TOMLINSON, ERICKSON, BAKER, WAUGH, SMUCKER, PIPPY, ARGALL, ALLOWAY, BOSCOLA, WOZNIAK AND D. WHITE, JANUARY 19, 2011 |
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| REFERRED TO BANKING AND INSURANCE, JANUARY 19, 2011 |
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| AN ACT |
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1 | Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An |
2 | act relating to insurance; amending, revising, and |
3 | consolidating the law providing for the incorporation of |
4 | insurance companies, and the regulation, supervision, and |
5 | protection of home and foreign insurance companies, Lloyds |
6 | associations, reciprocal and inter-insurance exchanges, and |
7 | fire insurance rating bureaus, and the regulation and |
8 | supervision of insurance carried by such companies, |
9 | associations, and exchanges, including insurance carried by |
10 | the State Workmen's Insurance Fund; providing penalties; and |
11 | repealing existing laws," providing for access to community |
12 | pharmacy services. |
13 | The General Assembly of the Commonwealth of Pennsylvania |
14 | hereby enacts as follows: |
15 | Section 1. The act of May 17, 1921 (P.L.682, No.284), known |
16 | as The Insurance Company Law of 1921, is amended by adding a |
17 | section to read: |
18 | Section 635.6. Access to Community Pharmacy Services.--(a) |
19 | If a pharmacy agrees to participate in a provider network under |
20 | subsection (c), no health insurance policy, government program |
21 | or pharmacy benefit manager providing coverage or reimbursement |
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1 | for the dispensing of prescription medications may, as a |
2 | condition for the provision of benefits or for the payment of |
3 | reimbursement for medications or pharmacy services, do any of |
4 | the following: |
5 | (1) Require a covered individual to obtain any prescription |
6 | medication from a mail order pharmacy. |
7 | (2) Impose upon a covered individual utilizing a retail |
8 | community pharmacy any copayment, deductible or other cost- |
9 | sharing requirement or prior authorization requirement not |
10 | imposed upon a covered individual utilizing a mail order |
11 | pharmacy. |
12 | (3) Subject any medication dispensed by a retail community |
13 | pharmacy to a covered individual to a minimum or maximum |
14 | quantity limit, length of script, restriction on refills or |
15 | requirement to obtain refills not imposed upon a mail order |
16 | pharmacy. |
17 | (4) Require a covered individual in whole or in part to pay |
18 | for any medication dispensed by a retail community pharmacy and |
19 | seek reimbursement if the individual is not required to pay for |
20 | and seek reimbursement in the same manner for a prescription |
21 | dispensed by a mail order pharmacy. |
22 | (5) Subject a covered individual to any administrative |
23 | requirement in order to use a retail community pharmacy that is |
24 | not imposed upon the use of a mail order pharmacy, including a |
25 | requirement to express an intent or exercise an option to use or |
26 | not use any particular pharmacy or type of pharmacy as a |
27 | condition of having a prescription dispensed by a retail |
28 | community pharmacy. |
29 | (6) Impose any other term, condition or requirement |
30 | pertaining to the use of the services of a retail community |
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1 | pharmacy that materially and unreasonably interferes with or |
2 | impairs the right of a covered individual to obtain prescription |
3 | medications from a retail community pharmacy of the individual's |
4 | choice. |
5 | (b) (1) No health insurance company, agent or contractor of |
6 | an insurance company, government program or pharmacy benefit |
7 | manager shall, in the administration of a health insurance |
8 | policy or a pharmacy provider network, take any action or allow |
9 | any action to occur that results in actions prohibited under |
10 | subsection (a). |
11 | (2) With respect to prescription medications dispensed by a |
12 | pharmacy eligible to participate in a provider network under |
13 | subsection (c), information regarding the dispensing of |
14 | prescription medications by a pharmacy shall not be used by a |
15 | health insurance company, an agent, affiliate or contractor of |
16 | an insurance company, a government program or by a prescription |
17 | benefit manager to promote, advertise or encourage the use of a |
18 | participating pharmacy, including a mail order pharmacy. |
19 | (3) Any health insurance company, agent or contractor of an |
20 | insurance company, or pharmacy benefit manager, or any pharmacy |
21 | owned or affiliated with a health insurance company or pharmacy |
22 | benefit manager, receiving rebates, discounts, allowances or |
23 | other incentive payments from any person for the dispensing of |
24 | prescription medications shall at least annually file a report |
25 | fully disclosing the amount, terms and conductions of the |
26 | payments to the department. The department may review and audit |
27 | records supporting the accuracy and completeness of the report |
28 | and shall, not later than ninety (90) days after the receipt of |
29 | a report, make available to the purchaser of any health |
30 | insurance policy or employe benefit plan with respect to which |
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1 | the payments where made, and to any pharmacy participating in a |
2 | network providing benefits to covered individuals receiving |
3 | benefits from the health insurance policy or employe benefit |
4 | plan, providing a summary of the amounts, terms and conditions |
5 | pursuant to which any such payments are made. The summary |
6 | prepared by the department shall not disclose information in a |
7 | format that will, with respect to any particular person making |
8 | the payments or with respect to the terms and conditions of |
9 | agreements relating to payments received from any particular |
10 | person, disclose any trade secrets relating to the payments. |
11 | (c) (1) A pharmacy licensed and in good standing with the |
12 | State Board of Pharmacy and not disqualified from participation |
13 | in the Medicaid or Medicare program for cause shall have a right |
14 | to participate in a pharmacy provider network, if the pharmacy |
15 | offers to enter into an agreement accepting the standard terms, |
16 | conditions or requirements relating to dispensing fees, payments |
17 | for product costs and other pharmacy services and the quality of |
18 | dispensing and other pharmacy services established by a health |
19 | insurance company, government program or pharmacy benefit |
20 | manager for all pharmacies in the provider network. |
21 | (2) The standard terms and conditions relating to dispensing |
22 | fees and payment for product costs and other pharmacy services |
23 | established under paragraph (1) shall provide convenient access |
24 | to retail community pharmacies consistent with the standards |
25 | established under section 2121 and shall take into consideration |
26 | the standards established by the Center for Medicare and |
27 | Medicaid Services of the United States Department of Health and |
28 | Human Services under section 1395w-104(b)(1)(c) of the Social |
29 | Security Act (49 Stat. 620, 42 U.S.C. § 1395w-104(b)(1)(c)). |
30 | (3) The standard terms and conditions relating to dispensing |
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1 | fees, ingredient costs and payments for pharmacy services |
2 | provided to retail community pharmacies shall not be less than |
3 | the amounts paid by or for the benefit of a health insurance |
4 | company, government program or pharmacy benefit manager for |
5 | dispensing of the same medications and the provision of |
6 | comparable services to any mail order pharmacy, including |
7 | amounts paid or distributed to a mail order pharmacy by an |
8 | affiliate of the mail order pharmacy or by the pharmacy benefit |
9 | manager. |
10 | (4) In determining whether the terms and conditions relating |
11 | to dispensing fees, ingredient costs and payments for pharmacy |
12 | services are not less than amounts paid to a mail order pharmacy |
13 | under paragraph (3), consideration shall be given to the extent |
14 | practicable to any rebates, discounts, allowances or other |
15 | incentive payments received for the dispensing of prescription |
16 | medications by a mail order pharmacy or an affiliate of a mail |
17 | order pharmacy, including a pharmacy benefit manager, from any |
18 | person other than amounts that reflect arm's-length payments |
19 | based on the fair value of services provided in exchange for |
20 | such payments, or amounts used to reduce the cost of |
21 | prescription medication benefits paid by the purchaser of a |
22 | health insurance policy or the services of a prescription drug |
23 | manager, or by a government program. |
24 | (5) A pharmacy shall not be deemed to be eligible to |
25 | participate in a provider network under this subsection during |
26 | any period of time for which its right to participate in a |
27 | network has been suspended or revoked for serious violations of |
28 | a network pharmacy provider agreement established under this |
29 | subsection that reasonably warrant suspension or revocation. |
30 | (d) (1) With respect to a health insurance company or |
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1 | pharmacy benefit manager: |
2 | (i) The department shall review the terms and conditions of |
3 | pharmacy networks as provided under section 2121, may utilize |
4 | the enforcement mechanisms, remedies and penalties available |
5 | under section 628 and may demand the production of any |
6 | information necessary to enforce this section. |
7 | (ii) Regardless of whether any enforcement action is taken |
8 | by the department, a covered individual, pharmacy or pharmacist |
9 | aggrieved by a violation of this section may seek relief to |
10 | remedy alleged violations of this section involving at least one |
11 | level of internal review and investigation as provided under |
12 | section 2161(b) and an opportunity to appeal to the department |
13 | in the manner provided under section 2142 unless, with respect |
14 | to a pharmacy or pharmacist, an agreement with the insurance |
15 | company or pharmacy benefit manager establishes an alternative |
16 | dispute resolution process as provided under section 2162(f). |
17 | (2) A covered individual, pharmacy or pharmacist aggrieved |
18 | by a violation of this section by a government program may |
19 | petition the agency responsible for the administration of the |
20 | program to review complaints regarding violations of this |
21 | section. |
22 | (e) It is the intent of the General Assembly that this |
23 | section and the other provisions of this act relating to health |
24 | insurance shall, as applied to persons subject to this act to |
25 | the fullest extent possible, be preserved from preemption by |
26 | Federal law. If any provisions of this act relating to health |
27 | insurance are preempted by Federal law or otherwise declared |
28 | invalid or unenforceable, the remaining provisions of this act |
29 | shall remain in force and effect. |
30 | (f) As used in this section: |
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1 | (1) "Covered individual" means an individual receiving |
2 | prescription medication coverage or reimbursement provided by a |
3 | health insurance policy, government program or pharmacy benefit |
4 | manager. |
5 | (2) "Government program" means any of the following: |
6 | (i) The Commonwealth's medical assistance program |
7 | established under the act of June 13, 1967 (P.L.31, No.21), |
8 | known as the "Public Welfare Code," except that the specialty |
9 | pharmacy drug program adopted by the Department of Public |
10 | Welfare may be exempt from the requirements of this section to |
11 | the extent the Department of Public Welfare, after review and |
12 | evaluation of the program, determines that the application of |
13 | the requirements of this section will materially increase the |
14 | costs of providing specialty pharmacy services. |
15 | (ii) The adult basic coverage insurance program established |
16 | under Chapter 13 of the act of June 26, 2001 (P.L.755, No.77), |
17 | known as the "Tobacco Settlement Act." |
18 | (iii) The Children's Health Care Program established under |
19 | Article XXIII. |
20 | (iv) The program of pharmaceutical assistance for the |
21 | elderly established under the act of August 26, 1971 (P.L.351, |
22 | No.91), known as the "State Lottery Law." |
23 | (v) An employe benefit plan described in section 1003(b)(1) |
24 | of the Employee Retirement Income Security Act of 1974 (Public |
25 | Law 93-46, 29 U.S.C. § 1003(b)(1)), applicable to government |
26 | employes who are residents of this Commonwealth, except that the |
27 | Pennsylvania Public Employees Benefit Trust Fund may be exempt |
28 | from the requirements of this section to the extent the Office |
29 | of Administration, after review and evaluation of the program, |
30 | and consultation with Commonwealth employe collective bargaining |
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1 | units, determines that the application of the requirements of |
2 | this section will materially increase the costs of providing |
3 | pharmacy services. |
4 | (vi) Any other program established or operated by the |
5 | Commonwealth that provides or pays for the cost of prescription |
6 | medications and pharmacy services provided to residents of this |
7 | Commonwealth. |
8 | (3) "Health insurance company" means a fraternal benefit |
9 | society, health maintenance organization, hospital plan |
10 | corporation, insurer, preferred provider organization or |
11 | professional health services plan corporation as defined in |
12 | section 603-B, or other entity subject to this act. |
13 | (4) "Health insurance policy" means a group or individual |
14 | health or sickness or accident insurance policy, subscriber |
15 | contract or certificate issued by a health insurance company |
16 | providing coverage or benefits for prescription medications to |
17 | residents of this Commonwealth. |
18 | (5) "Mail order pharmacy" means a pharmacy that |
19 | predominantly receives prescriptions by mail, telefax or through |
20 | electronic submissions and predominantly dispenses the |
21 | medications to patients through the use of the United States |
22 | mail or other common or contract carrier delivery service and |
23 | generally provides consultations with patients electronically |
24 | rather than face-to-face. |
25 | (6) "Pharmacy benefit manager" means a person, partnership, |
26 | association or corporation not holding a certificate of |
27 | authority under section 630 that establishes, operates, |
28 | maintains or administers agreements with pharmacies and health |
29 | insurance companies, government programs or employe benefit |
30 | plans described in section 1003(a) of the Employee Retirement |
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1 | Income Security Act of 1974 relating to the dispensing of |
2 | prescription medications and the provision of pharmacy services |
3 | to covered individuals, including agreements relating to the |
4 | amounts to be charged by the pharmacy for services rendered, |
5 | incentives provided to covered individuals to use the services |
6 | of designated pharmacies, or limitations on reimbursement only |
7 | when services are provided by designated pharmacies. |
8 | (7) "Retail community pharmacy" means a pharmacy that is |
9 | open to the public, serves walk-in customers and makes available |
10 | face-to-face consultations between licensed pharmacists and |
11 | persons to whom medications are dispensed. |
12 | Section 2. The Insurance Department may adopt regulations to |
13 | administer and enforce section 635.6 of the act. |
14 | Section 3. Section 635.6 of the act shall apply to health |
15 | insurance policies, government programs and agreements with |
16 | pharmacy benefit managers that are offered, issued, executed or |
17 | renewed or that have provisions related to prescription |
18 | medication benefits that are amended on or after the effective |
19 | date of this section. |
20 | Section 4. This act shall take effect as follows: |
21 | (1) The following provisions shall take effect in 120 |
22 | days: |
23 | (i) The addition of section 635.6 of the act. |
24 | (ii) Section 3 of this act. |
25 | (2) The remainder of this act shall take effect |
26 | immediately. |
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